Why is it in the news?
- SEBI (Securities and Exchange Board of India) board has approved flexibility in the framework for Social Stock Exchange (SSE).
- The aim is to enhance fundraising opportunities for Not-for-Profit Organizations (NPOs) through SSE.
|Zero Coupon Zero Principal Instruments (ZCZP)
· ZCZP instruments can be publicly or privately issued by registered NPOs listed on SSE.
· It serves as a financial instrument similar to bonds but does not carry any principal or interest.
More about the news
- Changes in Minimum Issue Size for ZCZP: Reduction in the minimum issue size for public issuance of Zero Coupon Zero Principal Instruments (ZCZP) by NPOs on SSE from Rs 1 crore to Rs 50 lakh.
- Changes in Minimum Application Size for ZCZP: Reduction in the minimum application size for public issuance of ZCZP by NPOs on SSE from Rs. 2 lakhs to Rs. 10,000.
- SSE provides a platform for social enterprises, including NPOs and For-Profit Social Enterprises, to raise funds through the stock exchange mechanism.
- When a donor contributes to a firm listed on SSE, the firm issues a ZCZP instrument to the donor.
- Social enterprises seeking listing on SSE must engage in social activities aligned with SEBI guidelines.
- Activities include eradicating hunger, poverty, malnutrition, promoting healthcare, supporting education, gender equality, empowerment of women, and LGBTQIA communities.
Benefits of SSE
- Brings together social enterprises and donors on a common platform.
- Facilitates funding and growth of social enterprises.
- Establishes mechanisms for robust standards of social impact and financial reporting.
- Ensures transparency in fund mobilization and utilization.